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Apply in IPO Through ASBA

Investors can now invest in Initial Public Offers (IPOs) by using Unified Payment Interface (UPI) as a payment mechanism. UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund transfers & merchant payments into one single mechanism.


How to invest using UPI:

The process of investing in IPO through UPI involves 3 major steps as mentioned below:

A
Bidding through UPI: Investors should fill the bid details in the application form along with their UPI ID. The applications may be submitted with the intermediary who will upload the bid details along with UPI ID in the stock exchange bidding platform. The stock exchange will electronically share the bid details, along with investors UPI ID with the Escrow/ Sponsor bank appointed by the issuer company.
B
Blocking of funds: The Escrow/ sponsor bank will request the investor to authorize blocking of funds equivalent to applicant amount and subsequent debit of funds in case of allotment. Upon validation of block request by the investor, the funds would then be blocked in the investors account and the investors will be informed of the same.
C
Payment for shares post allocation process: Once the shares are allocated, the process of debiting of funds from investors account would take place and excess money would be unblocked. This process would take place on the basis of the authorization given by investor using UPI PIN at the time of blocking of funds.

Points to Remember While Using UPI for Investing in IPO:

  • Create your UPI ID with a bank whose name is mentioned in the ‘List of Self-Certified Syndicate Banks (SCSBs) eligible to act as an Issuer Bank, available on website of SEBI.
  • Use only those mobile applications and UPI handles that are mentioned in the ‘List of mobile applications for using UPI in public issues available on website of SEBI.
  • Submit your application forms with UPI as a payment mechanism only to a Syndicate Member, or a Registered Stock Broker, or a Registrar and Transfer Agent or a Depository Participant.
  • The limit for IPO application is Rs.5 Lakhs per transaction on UPI and is available only for retail individual investors.
  • Third party UPI ID or investors using a third party bank account will not be considered for allocation.